Compound Interest Calculator
A Compound Interest calculator is a tool that helps you determine the future value of an investment by taking into account the compounding of interest over time. Compound interest is the interest calculated on the initial principal, which also includes all the accumulated interest from previous periods on a deposit or loan.
The formula for compound interest is given by:
A=P(1+rn)ntA=P(1+nr)nt
Where:
- AA is the future value of the investment/loan, including interest.
- PP is the principal amount (initial investment or loan amount).
- rr is the annual interest rate (in decimal form).
- nn is the number of times that interest is compounded per unit tt.
- tt is the time the money is invested or borrowed for, in years.
Here’s how to use the provided Compound Interest calculator:
- Principal Amount (PP): Enter the initial amount of money you are investing or borrowing.
- Annual Interest Rate (rr): Enter the annual interest rate as a percentage.
- Number of Years (tt): Enter the number of years the money will be invested or borrowed.
- Calculate Button: Click the “Calculate” button to compute the compound interest.
The calculator will then use the input values to apply the compound interest formula and display the result. The result typically shows the compound interest earned or paid over the specified time period. This tool is useful for individuals, investors, and borrowers to estimate the growth of investments or the cost of loans over time when interest is compounded.
